AmEx profit beats estimate on robust customer spending

AMERICAN Express reported third-quarter profit above Wall Street estimates on Friday (Oct 18), as higher spending on its cards offset a hit from bigger provisions for credit losses.

The credit card giant has been relatively insulated from economic shocks as it caters to affluent customers, but some analysts see limited room for its market value to grow further given that the stock is already trading at a record high.

Elevated interest rates and economic uncertainty could also discourage some customers from spending on non-essential purchases.

Its provisions for credit losses were US$1.4 billion in the quarter, compared with US$1.2 billion last year.

Still, profit rose 2 per cent to US$2.51 billion for the three months ended Sept 30. On a per-share basis, it earned US$3.49 versus the US$3.28 that analysts had forecast, according to estimates compiled by LSEG.

“The strong early results we’re seeing from our product refreshes reinforce my confidence that we’re investing in the right areas,” CEO Stephen Squeri said in a statement. REUTERS